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Determine the estimated units of sales of overall product

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Problem - Sales mix and break-even sales - Data related to the expected sales of kayaks and canoes for River Sports Inc. for the current year, which is typical of recent years, are as follows:

Products

Unit Selling Price

Unit Variable Cost

Sales Mix

Kayaks

$400

$240

80%

Canoes

800

480

20%

The estimated fixed costs for the current year are $1,440,000.

Instructions -

1. Determine the estimated units of sales of the overall product necessary to reach the break-even point for the current year.

2. Based on the break-even sales (units) in part (1), determine the unit sales of kayaks and canoes for the current year.

3. Assume that the sales mix was 20% kayaks and 80% canoes. Determine the estimated units of sales of overall product necessary to reach the break-even point for the current year.

4. Based upon the break-even sales (units) in part (3), determine the unit sales of kayaks and canoes for the current year.

5. Why is the overall enterprise break-even point so different in (1) and (3)?

Reference no: EM132708161

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